What is the Fair Insurance Code?

The Fair Insurance Code is the industry self-regulatory code published by the Insurance Council of New Zealand (ICNZ). It sets the standards ICNZ-member insurers commit to when dealing with policyholders — how they handle applications, claims, complaints, vulnerable customers, and claims communication. The current version is published at icnz.org.nz/about-the-industry/code/.

Does the Fair Insurance Code apply to business policies?

Yes. The Fair Insurance Code applies to both consumer and business insurance issued by ICNZ-member insurers. Some specific provisions reference vulnerable individuals and primarily target consumer contexts, but the core claims-handling and communication obligations apply across both. Business policyholders have the same right to clear communication, claim timeframes, and complaints escalation as consumer policyholders.

Is the Fair Insurance Code legally binding?

The Code is industry self-regulation, not statute. ICNZ-member insurers contractually commit to the Code when they join. Breach of the Code does not itself create a court remedy, but it is admissible evidence in complaints to dispute resolution services (FSCL, IFSO) and to the courts. The Insurance Contracts Bill working through Parliament would strengthen some Code provisions into statute — check legislation.govt.nz for the current status.

What complaints process does the Fair Insurance Code require?

The Code requires insurers to operate an internal complaints process and to refer unresolved complaints to an external dispute resolution scheme (FSCL or IFSO). The insurer must give written reasons for declined claims, allow the policyholder reasonable time to respond, and not unreasonably delay. If a complaint isn't resolved internally within the timeframe specified by the insurer (commonly two months), the policyholder can escalate directly to the external scheme.

What does the Code say about claims timeframes?

The Fair Insurance Code requires insurers to acknowledge claims promptly and progress them without undue delay. Specific day-count commitments vary by insurer and policy type but ICNZ-member insurers are expected to provide regular updates on claim progress, explain any delays, and complete simple claims within a reasonable period. For complex commercial claims with loss adjuster involvement, timeframes are longer but the communication standard remains.

What happens if my insurer is not an ICNZ member?

ICNZ membership is voluntary but the major NZ general insurers (Vero, IAG-owned brands AMI/NZI/State, Tower, FMG, AA Insurance, MAS, Ando, AIG, QBE, Chubb, Zurich and others) are members. Non-member insurers operating in NZ are still subject to the Financial Markets Conduct Act 2013, the Insurance (Prudential Supervision) Act 2010, and the dispute resolution scheme membership requirement under the Financial Service Providers Act. The Code itself only binds ICNZ members.

Where do I escalate if my insurer rejects my business claim?

Step 1, request a written reason for the decline. Step 2, submit a written internal complaint to the insurer's complaints team — the Code requires insurers to operate a clear internal complaints process. Step 3, if unresolved within two months (or earlier if the insurer issues a final decision), escalate to the insurer's external dispute resolution scheme — FSCL (Financial Services Complaints Limited) or IFSO (Insurance and Financial Services Ombudsman). Both schemes are free to the policyholder and can make binding determinations on the insurer.

ICNZ Fair Insurance Code — Your Business Policyholder Rights in NZ

What the Code is, in one paragraph

The Fair Insurance Code is the Insurance Council of New Zealand's industry self-regulatory code. ICNZ is the body representing general insurers in NZ, and most of the names you'll recognise on a business insurance comparison are members — Vero, IAG (NZI, State, AMI), Tower, FMG, AIG, QBE, Chubb, Zurich, MAS, AA Insurance, Ando and others. The Code sets the standards member insurers commit to in dealing with policyholders — applications, underwriting, claims handling, complaints, communications. It is not a statute, but it is enforceable through dispute resolution schemes (FSCL, IFSO) and admissible in court. Read the current version on the ICNZ website directly — this guide is a navigation aid.

The core promises in the Code

The Code is structured around the moments a policyholder interacts with an insurer. The promises sit at each moment:

1. Buying a policy

The insurer will provide information in plain language so the policyholder can make an informed decision
The insurer will tell the policyholder about the duty of disclosure and explain what's expected
Any questions on the application form must be relevant to underwriting
Underwriting decisions must be based on relevant, accurate information

For business policyholders this matters at every renewal. The "material non-disclosure" decline reason is the single most common dispute pattern in NZ commercial insurance — answer every question accurately, keep records of what you disclosed, and re-disclose changes during the policy period.

2. Documents and communication

Policy documents will be made available in a clear, accessible format
Changes to the policy must be notified in writing
The insurer will respond to enquiries in a reasonable time
Renewal terms will be sent in advance, allowing the policyholder to compare and choose

For commercial policies, this includes the policy schedule, the policy wording, any endorsements, and any subsequent amendments. Keep them filed together — at claim time, the schedule + wording + endorsements at the date of loss is what determines coverage.

3. Making a claim

This is where most policyholders read the Code for the first time. Code commitments at claim time include:

Promptly acknowledge the claim
Give clear information about what's needed to progress the claim
Explain decisions and provide reasons in writing if a claim is declined or limited
Keep the policyholder informed of progress, including any delays
Pay claims promptly once accepted
Treat policyholders fairly and with respect

For business claims, the typical chain is: claim notification → insurer assigns claims handler → loss adjuster appointed (for material damage / BI / liability above a threshold) → forensic accounting (for BI claims) → settlement offer or decline. Each step has Code commitments around communication and reasoning.

4. When something goes wrong — the complaints process

The Code requires every member insurer to operate an internal complaints process and to be a member of an external dispute resolution scheme. The two NZ schemes covering general insurers are FSCL (Financial Services Complaints Limited) and IFSO (Insurance and Financial Services Ombudsman). Both are free to use, independent of the insurer, and can issue binding determinations.

The escalation path is:

Internal complaint. Lodge a written complaint with the insurer's complaints team. Quote the Code where relevant. Insurers should resolve internally within two months.
Final response or deadline expiry. Once the insurer issues a final decision, or two months have passed without resolution, you may escalate.
External scheme. Lodge with FSCL or IFSO (whichever the insurer is a member of — check their disclosure document). Submit the complaint, the insurer's response, and supporting documents. The scheme investigates and issues a determination.
Court. Available either before or after dispute resolution. The scheme determination is binding on the insurer (not the policyholder) up to monetary limits set in scheme rules.

Where the Code matters most for business policyholders

Three Code promises consistently make the difference on commercial claims:

(a) Written reasons for any claim decline or limitation

A decline letter must explain which policy term has been applied and why the insurer reads the facts as triggering it. "Not covered" without specifics is non-compliant — request the specific clause reference. If the insurer can't pin the decline to a clause, the decline is hard to defend at FSCL/IFSO.

(b) Reasonable time + progress updates

Business interruption claims in particular take months because forensic accountants need to reconstruct lost profit. The Code does not require fast claims, it requires communicated claims — regular updates, reasoning for delays, indicative next steps. A months-long silence is a Code breach.

(c) Fair handling of partial settlements and reinstatement

Material damage claims often settle in stages — emergency repairs first, full reinstatement later. The Code requires fair handling of each stage including correct application of the indemnity vs reinstatement basis (whichever the policy specifies). Cash settlements offered in lieu of repair should reflect the contractual basis of cover, not a discount.

How brokers and advisers fit

If you bought your policy through a Financial Advice Provider (an "intermediary" in Code language), the adviser handles the claim notification, liaison with the insurer and complaints escalation on your behalf. The Code applies to the insurer regardless of how the policy was sold, but advisers are also subject to the Financial Markets Conduct Act 2013 and the Code of Professional Conduct for Financial Advice Services. If you have concerns about adviser conduct, those run to the Financial Markets Authority and the relevant dispute resolution scheme.

What the Code is not

Not a guarantee of coverage. The Code is about how insurers handle the relationship, not what they cover. Coverage is determined by the policy wording.
Not a substitute for the Insurance (Prudential Supervision) Act 2010 or the Financial Markets Conduct Act 2013. The statutory framework is separate.
Not enforceable by direct court action on Code breach alone — but admissible evidence and used by dispute schemes in determinations.
Not a binding obligation on non-ICNZ insurers. Confirm Code coverage by checking your insurer's ICNZ membership at icnz.org.nz/about-icnz/members/.

Practical claims hygiene built from the Code

Notify the insurer promptly — within the policy notification clause
Put everything in writing where possible — email rather than phone for the audit trail
Keep contemporaneous notes of phone calls — date, time, person, key points
Request written reasons at every decision point
If you have a broker, route requests for written reasons through them
Use the Code as a reference in complaint letters — name the specific commitment the insurer has breached
Don't let two months pass without a written update — escalate

Quick FAQ

How do I check if my insurer is an ICNZ member?

The full member list is at icnz.org.nz/about-icnz/members/. Most major NZ general insurers are members.

Which dispute resolution scheme handles my insurer?

Your insurer's disclosure document (or the policy schedule) will name FSCL or IFSO. You can also search the Financial Service Providers Register at fsp-register.companiesoffice.govt.nz.

Are dispute resolution schemes free?

Yes, to the policyholder. The schemes are funded by member insurers. There is no fee to lodge a complaint or for the scheme's investigation.

Can the dispute resolution scheme overturn a claim decline?

Yes. FSCL and IFSO can make binding determinations on the insurer up to scheme monetary limits. The policyholder is not bound by the determination and retains the right to court action; the insurer is bound up to the scheme's monetary cap.

Primary sources cited in this guide

Disclaimer: This article is general information for New Zealand businesses and not personalised legal or financial advice. The Fair Insurance Code is industry self-regulation; specific complaint outcomes depend on the facts and policy wording. Consult the primary sources linked above or a lawyer for your specific situation. SmallBusinessInsurance.co.nz is operated by Evolve Group Limited (FSP711891).

ICNZ Fair Insurance Code — Your Business Policyholder Rights